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Total Disability Based on Individual Unemployability. What does it Mean

One thing that you learn as you get into veteran’s benefits law is there is an abundance of acronyms. There are more than any sane person cares to remember. However, you always want to remember: TDIU.

What is TDIU?

TDIU (also referred to as IU) is the VA acronym for Total Disability based on Individual Unemployability. TDIU allows veterans to receive compensation at one-hundred (100) percent when their individual disabilities do not.  VA math is a topic for another day.

TDIU is like gap insurance for your car. When your car is totaled but there is an outstanding loan, you may owe more than insurance pays.  If the total loss on the car does not cover the remaining loan, gap insurance bridges the difference. TDIU is a bridge to a 100% rating when you cannot work due to service-connected disabilities.

How Do I ReceiveTDIU?

The law provides two routes to IU:  schedular and extra-schedular. Of these two, schedular is the easier to obtain.  It is also much more common. To qualify for a schedular rating a veteran must meet a two-prong test.

Schedular Individual Unemployability

The first prong a veteran must satisfy is the VA’s rating criteria.  The second prong is an inability to maintain substantial gainful employment.

Rating Criteria

A veteran can meet this first prong two ways.  A single service-connected disability rated sixty (60) percent or higher is the first way to meet the criteria. Multiple ratings that combine to seventy (70) percent with at least one of the underlying ratings being forty (40) percent is the second.  The veteran must prove the second prong after showing he is schedularly qualified.

Substantial Gainful Employment

The second prong is a showing that he is unable to maintain “substantial gainful employment as a result of his service connected disability or disabilities.” The second part of that sentence is particularly important. It is insufficient to show that a veteran has a qualifying rating and that he is not working. The inability to work must be due to his service connected disabilities.

IU do not completely disqualify a veteran from working. “Substantially gainful” describes the type of work a veteran can or cannot maintain. A job that pays a wage over the poverty threshold for an individual is defined as substantially gainful. The U.S. Census Bureau defined the poverty threshold as $12,752.00 in 2017. There are additional regulations concerning what the VA considers “sheltered employment,” but the dollar amount is a good rule of thumb.

Even when a veteran is qualified, it is difficult to get the VA to grant TDIU. The best possible evidence you can submit is an expert opinion.  The expert should state in no uncertain terms that you are unable to work because of service-connected disabilities. If the expert includes non-service connected disabilities, the VA will deny the claim.

Extra-schedular Individual Unemployability

A veteran can obtain extra-schedular TDIU. This is a significantly more difficult route. Extra-schedular IU means the veteran does not meet the rating requirement described above, but is nonetheless unable to maintain substantial gainful employment due to his disabilities. In these cases, the VA is required to submit the case to the Director of Compensation in Washington, D.C. for extra schedular consideration. The director then reviews the case and makes a determination on the issue of extra-schedular IU.  In most cases however, the VA is very likely to deny these claims until a veteran meets the schedular requirements.

How do I file for Individual Unemployability?

If you feel that you are unable to work due to your service connected disability, you need to file a VA Form 21-8940, Veteran’s Application for Increased Compensation Based on Unemployability.  Once the form is filled out, it must be filed with your regional office.

When filling out the 8940, veterans will reach Section 17.  Section 17 of the form asks the veteran to “list all employment including self-employment for the last five years.”  This section sounds as though it is asking about the work in the past five years, at the time of writing 2013 through 2018.  This is not what the form is asking of the veteran.  The form is referring to is the last five years that the veteran was actually employed.  For example, if the veteran last worked as a mechanic in 1998, even though the veteran is filling out the form today (2018), the veteran would need to list his job(s) as a mechanic from 1993 through 1998.

Total Disability based on Individual Unemployability

Article by: Nicholas Simpson

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